Unlocking Growth with Data

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Welcome to Katalys Connect – your weekly shortcut to the latest in performance marketing.

[Read time: 4 minutes]

What’s in this issue? Each Tuesday, we pack the latest trends, actionable insights, and industry breakthroughs into a quick read – ensuring you’re not just keeping up, you’re staying ahead.

  • Monetization: Discover how Google’s AI-powered search overhauls are reshaping publisher revenue streams and pushing the need for innovative first-party data solutions.
  • Growth: See how TikTok Shop’s rapid rise in the beauty e-commerce market and Amazon’s dominance in retail media are reshaping industry growth strategies.
  • The Future of Commerce: Explore how generative AI could impact the next economic crisis and Costco’s entry into retail media could transform market dynamics.
Monetization

AI’s Search Shake-Up • Google’s new “Generative AI Overviews” may revolutionize search, but digital publishers fear it could devastate their revenue streams.

  • A study suggests that 90% of users might never leave Google’s search results page due to AI overviews summarizing the most relevant content – significantly reducing website visits and ad revenue for publishers.

  • The News/Media Alliance has urged the FTC and DOJ to investigate Google’s AI Overviews, fearing long-term revenue impacts for digital publishers.

First-Party Data Wins • Hearst Magazines is using AI and first-party data to tackle the post-cookie challenge in ad targeting.

  • Hearst boasts that its new AI-powered tool, Aura, improves click-through rates by 15-20% without relying on cookies.

  • Tested on 25 sites with 145 million U.S. monthly users, Aura analyzes billions of signals, including commerce data, to predict reader intent.

Risky Business of AI Licensing Publishers weigh the benefits and risks of content deals with OpenAI amid concerns of underpayment and loss of control.

  • OpenAI offers publishers $1 million to $5 million annually for content licensing, with News Corp’s deal valued up to $250 million.

  • While agreements enhance ad targeting and content optimization for publishers, improving engagement – skeptics question whether these deals fairly compensate publishers and worry about AI’s impact on their control and relevance.
Growth

Smarter Ad Campaigns • Google Ads’ new AI-powered Brand Recommendations streamline campaign optimization for brand marketers.

  • These recommendations analyze campaign history and trends, offering tailored insights to improve performance.

  • Advertisers receive automatic recommendations on ways to improve brand campaign performance and effectiveness, updated regularly as Google’s systems discover new optimization opportunities ensuring they stay ahead with Google’s latest best practices.

TikTok Shop Dominates Beauty • TikTok Shop rapidly becomes a top player in the beauty e-commerce market, outpacing many traditional retailers.

  • In just nine months, TikTok Shop has surged to the ninth-largest beauty retailer in the U.S. and second in the U.K.

  • With this new development, beauty retailers will need to stay flexible and creative, adapting to the economic pressures and TikTok’s discounting model to succeed.

Amazon Tops Retail Media • Brands outpace agencies in retail media advertising, with Amazon as the clear frontrunner in ad spend.

  • Nearly 70% of brands advertise on retail media platforms compared to 44% of agencies – a significant gap that underscores an opportunity for agencies to catch up by leveraging retail media to maximize client reach.

  • Comparatively, Amazon is the top platform, used by 84% of brands and 82% of agencies for retail media advertising, with cost being the main barrier to entry for those not yet using the platform.
Future of Commerce

AI’s Potential Perils • A top International Monetary Fund official warns that Generative AI could transform a routine recession into an economic calamity, posing unprecedented risks to labor and financial markets.

  • During economic downturns, generative AI might drive companies to cut costs by shedding a wider range of jobs, including higher-skilled cognitive roles, leading to unprecedented job losses.

  • Supply chain models built on AI could stoke forecasting mistakes that cause huge swings in inventories and production leading to market turmoil.

Retail Media’s New Contender • Costco is planning to tap into its vast shopper data to build a powerful ad network, aiming to rival top retail giants in the booming retail media space.

  • Costco’s membership model allows precise tracking of individual purchases, enhancing ad targeting and measurement capabilities.

  • This new venture could quadruple Costco’s current media revenue by unlocking the full potential of its shopper data.

Amazon’s Strategic Purchase Amazon enhances its presence in India by acquiring key assets of the popular video streaming service MX Player.

  • MX Player, with a 15% market share, will help Amazon expand its presence beyond urban areas, making the e-commerce platform more popular and trustworthy in smaller cities.

  • Retaining the MX Player branding, Amazon aims to integrate its services while capitalizing on the streaming platform’s established appeal.

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